Popular cryptocurrency exchange Poloniex has put a temporary hold on its legacy account users as the Delaware-based platform is implementing a new know your customer (KYC) verification process.
Back in December, Poloniex started to implement an identity verification process for all its new registrants. At the time, legacy account holders were ‘grandfathered’ with the privilege of not being required to submit identity credentials.
Now Poloniex inactivates accounts that were registered under its old guidelines, reportedly sending emails requesting legacy users to comply with the new verification method or their unverified accounts will be closed.
As of now, the latest information coming from customers demonstrated that the majority of frozen accounts belong to those owners who have not previously undergone verification. They were forbidden to withdraw funds from accounts and are required to undergo verification immediately.
However, the new system doesn’t seem to work properly as some of those owners who have undergone verification are still unable to access their account even after completing the automated process.
This is what the customers of the exchange are discussing on the Reddit forum. One user complains: “I got an email reply saying i [sic] had been verified. (My profile now says i [sic] have a ‘level 3 verification’ – the type that allows $25,000 per day).” But when he goes “to trade or try to place an order,” it tells him “’account frozen.’
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It is rumored that the actions of the exchange are dictated by pressure from the US regulators after the firm was acquired by Goldman Sachs-backed Circle. Poloniex was recently the subject of news blasts after Circle acquired the cryptocurrency exchange in a deal reportedly worth $400 million.
With Poloniex’s subreddit increasingly being dominated by complaints from customers, the company has issued an explanatory tweet seeking to clarify the reasons behind their failure to unblock accounts.
Some of you have raised questions about recent updates to our onboarding and identity verification processes. Rest assured your funds are safe, and please see our product update with more detail on next steps: https://t.co/2LgDv0g17m
— Poloniex Exchange (@Poloniex) May 27, 2018
Despite the words of assurance, the comments on the tweet reveal many customers claiming that their withdrawals still have not been processing, with many others alleging that verification is not working for most.